Gold prices firm up, but still a long way away from record highs
The prices of gold and silver firmed on Wednesday, as escalating concerns over the economic fallout from the spread of the coronavirus' Delta variant dented sentiment towards riskier assets, lifting bullion's appeal.
On MCX, both the precious metals saw their price go up, though gains were muted. Gold futures were up 0.2% to ₹47,374 per 10 gram while silver rates rose 0.37% to ₹63,462 per kg.
Gold prices are on the path to recovery, but is still lower than last year's high of ₹56,200 per 10 gram.
In global markets, spot gold rose 0.3% to $1,791.67 per ounce, hovering below a more than one-week high of 1,795.25 hit on Tuesday. Silver, meanwhile, rose 0.7% to $23.79 per ounce.
"The elephant in the room is this Delta variant and whether it does materially affect the global recovery. In that situation, gold is likely to find more haven buying," said Jeffrey Halley, a senior market analyst, Asia Pacific at OANDA.
Another factor taking the shine off the upward trajectory of gold prices is the strengthening of dollar. After hitting a nine-month high against the euro in the previous session, the dollar held on to recent highs against other major currencies.
Gold often competes with the dollar as a safe store of value during political and financial uncertainties, with a higher dollar also making gold more expensive for those holding other currencies.
Concerns over China's regulations for its once-freewheeling internet sector and turmoil in Afghanistan also kept investors on the edge.